It’s a common belief that credit cards are hazardous to financial stability. Even though the statement is true to some extent, yet if used smartly, credit cards can be of great help. Hence, it is important to know the tips and tricks to manage credit card efficiently. Here are the top points for using a credit card by our experienced financial experts.
Make full monthly payments
The average American is stuck in credit card debt. We buy what we cannot afford and end up skipping our credit card’s bill. To stay away from the financially crunched crowed, you must buy things under your spending limit and should pay the bill full every month.
Although it might seem an impractical thing, it is your best bet to use credit card smartly. Not only will you be preventing credit card debt but will also be dodging interest on your expenses. For instance, the benefits of a twenty percent sale are marginalized by an eighteen present finance charge.
Do not be a late payer
Apart from paying your dues in full, you should also be paying them before the deadline. Majority of credit card issuers can charge as much as $40 on late payment. Also, remember that late payment can damage your credit score as it derives thirty-five present of its total from your payment history. While paying bills on time, you will ensure better credit health and also lowered interest rates in the longer run.
You can either set a reminder for paying the credit or go for automated payments directly from your account like a bank draft.
Credit card is a compliment to your budget
If you believe in living strategically, then your credit card can be easily used as a back up for your budget. First of all, create a saving and spending plan as per your monthly income and decide the use of your credit card beforehand. Now, you would be using your card anyway, but the planning will guide you to stay true to your cause while earning rewards. It is recommended that you keep checking your account activity at regular intervals to stay on track.
Determine your limits
In case you are not able to curb your cravings to use the credit card, then it is better to ask the issuer to set a lower credit limit as per your spending ability. Majority of the issuers are willing to change your lower credit limit per your preference for they want you to pay back the money in time.
Do not hesitate as the chances of a dramatic emergency are quite low in comparison to you buying an extra pair of branded sunglasses.
Chose card prudently
Always go for credit cards that provide extra perks which you can practically avail. It is better to undergo thorough research before settling for any company as card issuers are eager to provide you special benefits to stay ahead in the competition.
If used correctly, credit cards can guide you towards financial stability a lot more easily.